Cases of Note-Copyright
Cases of Note-Copyright
Bruce Strauch Th e Citadel 0 1 2
0 1 2
Bryan M. Carson 0 1 2
0 Jack Montgomery Western Kentucky University , USA
1 Western Kentucky University , USA
2 Bruce Strauch , The Citadel
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Cases of Note — Copyright — Measure of Damages
FRANK GAYLORD, v. UNITED STATES,
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT, 678 F.3d
1339; 2012 U.S. App. LEXIS 9719.
Frank Gaylord held copyright on a cluster
of statues — “The Column” — nineteen
stainless steel sculptures of a platoon of soldiers.
This is the centerpiece of the Korean War
Veteran’s Memorial in the National Mall in D.C.
The USPS issued a stamp commemorating the
Korean War armistice, and — you guessed it
— it featured a photo of “The Column.” 86.8
million of these stamps were sold. And the
Post Office made no attempt to seek Gaylord’s
permission. Rather, it licensed the image from
The stamp grossly infringed in three
classes of items: (1) stamps used to send mail;
(2) stamps kept by collectors; (3) images of
the stamp on retail goods. Gaylord did not
care for this and sued in the Court of Federal
Claims under 28 U.S.C. § 1498(b). He won
and then won again on the appeal. The case
was remanded on the issue of damages, which
is what this is about.
Gaylord wanted a 10% royalty on $30.2
million in revenue. He was denied this —
given $5,000! — and again went up on appeal.
Section 1498(b) waives U.S. sovereign
immunity for copyright infringement. As to
damages, it says “recovery of his reasonable
and entire compensation.”
And now we get to wrestle with what that
Gaylord said reasonable royalties are the
presumptive award under § 1498(a) — patent
infringement by the U.S. — and should be
presumptive under (b) — copyright
infringement. He presented evidence of the royalty he
typically received for letting folks put “The
Column” on t-shirts and miniature statues.
The USPS called the 10% royalty
speculative and argued $5,000 represented “the market
value at the time of the taking.” They had never
paid more than that, and never would. So that
was the market value.
Leesona Corp. v. United States, 599 F.2d
958 (1979) — a patent infringement case —
limited “reasonable and entire compensation” to a
reasonable royalty. Id. 968. Punitive damages
were excluded as being more than “just
compensation.” Id. And Leesona held “the proper
measure … is what the owner has lost, not what
the taker has gained.” Id. at 969.
Our appeals court in Gaylord held
copyright damages under 17 U.S.C. § 504
— stealing by ordinary folk not the
government — are appropriate
here. As Gaylord cannot
show “lost sales, lost
opportunities to license, or diminution
in the value of the copyright,”
the damages should be based on
“the fair market value of a license
covering the defendant’s use.” See
On Davis v. The Gap, Inc., 246 F.3d
152, 164 (2d Cir. 2001).
You arrive at this sum based on
a hypothetical, arms-length
negotiation by the two parties. “In
situations where the infringer could have
bargained with the copyright owner
to purchase the right to use the work, actual
damages are what a willing buyer would have
been reasonably required to pay to a willing
seller for plaintiffs’ work.” Jarvis v. K2 Inc.,
486 F.3d 526, 533 (9th Cir. 2007).
The trial court looked only at what the
USPS had paid in the past, and that was in the
$1,500 to $5,000 range.
Geez. Are artists that desperate to get on
At any rate this was erroneous. The Post
Office could rely on previous cheapskate
purchases and hide behind self-serving “internal
policies” that supposedly prohibited them from
paying more. See Rite-Hite Corp. v. Kelley
Co., 56 F3d 1538, 1555 (Fed. Cir. 1995).
And could potentially steal something of
astronomical value for a mere $5,000.
What the infringer wants to pay is not the
measure. Rather you should look at evidence
from both sides to find the fair market value.
from page 53
Moving right along, in warmer NY days,
Audrey said she has seen Athena Michael
(once at Wiley) and Sharon O’Connell (at
Yankee and YBP) and they supped Moroccan
in New York! Athena is no longer at Wiley but
The photographer believed the monument
architects owned the rights to “The
Column” and agreed to pay a 10% royalty
to them for all sales and licensing
of his photo. And incredibly, the
USPS licensed the stamp image
for use on retail goods for a royalty
And Again It’s Remanded
Of course, you so frequently don’t
know how these things turned out, but
Gaylord seems to be in pretty good
shape. The trial court was pretty much
directed to give him a lot more than
There was discussion of how the value
might be arrived at. Were stamps used to mail
letters of value because of “The Column” or
primarily because they were postage? A
onetime fee might more accurately capture the
value here, but an arbitrary cap of $5,000 is not
$5.4 million in stamps were kept by
collectors. This is pure profit for the Post Office
as they didn’t have to handle any mail. This
seems to lean toward the 10% royalty.
And then there’s all the retail junk the Post
Office sold — pins, postcards, magnets, framed
art, cancellation keepsakes, and other
philatelic collectibles decorated by “The Column.”
Again, this leans toward royalty, and the
recovery is not limited by the Post Office profits.
Presumably because govt. management is
so inefficient, the production and
merchandising costs are unnaturally high. And the USPS
— like Hollywood — could just show no profit
for a royalty to apply to.
she landed on her feet! I just can’t remember
where! Help, someone!
Heard from the wonderful Chuck Hamaker
the other day. You will remember that Chuck
missed the Conference this year because he was
sick! Boo hiss! Anyway, Chuck sounds good
and is doing all sorts of new things (as always)
continued on page 55